Nifty Forms Doji On Weekly Charts

The domestic stock market reacted positively to ‘Operation Sindoor’. NSE Nifty gained by 34.80 points or 0.14 per cent and closed at 24,313.40 points. The Nifty Auto and Midcap indices were the top gainers with 1.66 per cent and 1.59 per cent. The Smallcap, Microcap, Consumer Durables, Realty and Media indices gained over one per cent. The FMCG, Health care and Pharma indices were down by 0.33 - 0.52 per cent. The India VIX is up by 0.34 per cent to 19.06. The market breadth is positive as 1,772 advances and 1,049 declines. About 95 stocks hit a new 52-week low, and 118 stocks traded in the lower circuit. BSE, Mazdock, HDFC Bank, Tata Motors, and Reliance were the top trading counters in terms of value.

The Nifty opened with a gap down as the Operation Sindoor was executed at midnight. It recovered from the opening low and formed an open low candle. The recovery was with a higher volume than the previous day. This indicates that the market has discounted the geopolitical tensions and is well prepared for the worst-case scenario. The inherent bull strength is still intact, as the prior day’s bearish engulfing candle failed to get the confirmation for its implications. The RSI and MACD show a flat momentum. On a weekly chart, the index has formed a Doji candle. The market is yet to form a lower low. For a downside, the index must close below 23,991 points. For an upside, it is necessary to close above the 24,589 points, which is last Friday’s high. The index tested the 61.8 per cent retracement level twice. It must close above 24,545 decisively with high volume. Above the target is open to above 25,000 level. As the army is preparing a full-fledged attack on terror camps in PoK, the repercussions may impact the market sentiments. Any strong retaliation from the Opponent needs to be analysed. For now, a cautious approach is needed, along with risk management.

(The author is partner, Wealocity Analytics, Sebi-registered research analyst, chief mentor, Indus School of Technical Analysis, financial journalist, technical analyst and trainer)